Ethiopians are waiting months to open letters of credit (L/Cs) as the country works to boost its foreign exchange reserves.

Now the country's reserves are recovering, albeit after a sharp devaluation of the local currency.

Currency adjustments

The authorities devalued the birr with the aim of stimulating exports, according to a report by the central bank.

The National Bank of Ethiopia (NBE) report says that the birr was trading at a rate of 9.4526 birr to the US dollar in July 2008. By April 2009 the birr was trading at a rate of 11.082 birr to the US dollar.

Exchange boost

According to the governor of NBE, Teklewold Atnafu, devaluation along with other measures taken by the bank have helped Ethiopia increase its foreign exchange reserve by about 12.1 per cent over recent months.

This he said should make it easier for importers who have had to wait a long time to open L/Cs. According to the central banker, both public and private sector applicants have had to wait more than three months to open L/Cs.

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